07 Feb 2019

NSW biodiversity offsets to be recognised in amended bilateral agreement

By Nick Thomas, John Clayton, and Samuel Wicks

A draft amended bilateral agreement between the Commonwealth and NSW Governments would accredit NSW biodiversity assessments and offsets, and would allow some projects on Commonwealth land to be assessed under the bilateral for the first time.

The Commonwealth and NSW Governments have agreed amendments to the bilateral agreement for NSW under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act), and have invited submissions until 21 February 2019. The amendments signal some important progress in the use of NSW assessment systems for projects which need EPBC Act approval.

How do bilateral agreements work?

Nearly all development in NSW will require some kind of development approval under the Environmental Planning and Assessment Act 1979 (Planning Act). Where that development is likely to have a significant impact with respect to a "matter of national environmental significance" which is prescribed in the EPBC Act (NES Matter), EPBC Act approval will also be required. This leads to duplication, and a risk of inconsistencies, in assessment and approval processes at the State and Federal levels.

The EPBC Act attempts to streamline this dual assessment and approval system by providing for State and the Commonwealth Governments to agree that:

  • accredited State assessments can be used in place of a Commonwealth assessments - this agreement is called an assessment bilateral agreement;
  • accredited State approvals can used in place of a Commonwealth approval - this agreement is called an approval bilateral agreement.

At present, NSW and the Commonwealth only have an assessment bilateral agreement. It was signed in 2015 and it is now proposed for amendment.

Key changes to the assessment bilateral

The proposed amendments have been prompted by the introduction of a new biodiversity assessment and offset scheme in NSW, under the Biodiversity Conservation Act 2016 (BC Act) and amendments to the Planning Act.

Both Governments view the amendments as minor, so the amendment process will be more streamlined than if more substantial changes were proposed. However, the proposed amendments have important consequences for NSW major projects.

The main proposed amendments are:

  • changes to accept the assessment and offsetting scheme in the BC Act;
  • extension of the bilateral agreement to projects which are on or partly on Commonwealth places or are under taken by Commonwealth agencies, if the relevant State and Commonwealth Ministers agree ‒ this will allow these projects to be assessed in the same way as other project which trigger an EPBC Act approval requirement; and
  • various drafting amendments to update references to the Planning Act which have been changed as part of the recent overhaul of the NSW planning legislation ‒ these include removing accreditation of the assessment process which some NSW government agencies undertake for infrastructure development where no separate Planning Act approval is required, unless the assessment includes an EIS.

Biodiversity assessments and offsets

The most important changes proposed for the bilateral agreement concern the way in which biodiversity offsets are dealt with. The introduction of the BC Act has, among other things, implemented a statutory offsets scheme which is used to calculate and determine offsets, with the scheme being integrated with the planning approvals regime under the Planning Act.

In light of this, the assessment bilateral is proposed to be amended to recognise NSW offsets scheme under the BC Act, including payments into the Biodiversity Conservation Fund as a form of offset.

The notification on the Commonwealth Department of Environment and Energy website states that "both governments agree that endorsing the BOS for both NSW and Commonwealth-listed threatened species and communities will provide for robust, transparent biodiversity and streamlining outcomes".

In applying the offsets scheme for projects which need EPBC Act approval, the bilateral agreement will require NSW to consider:

  • relevant adverse impacts on any NES Matters which trigger an EPBC Act approval requirement for the project; and
  • whether the offset proposed under the NSW offsets scheme will address the residual impact on NES Matters.If the NSW scheme can address the residual impact, the NSW Government must, as part of its assessment:
    • identify the impact that is proposed to be offset; and
    • set out any condition which it recommends should be imposed to deal with the residual NES Matter impact.

In other words, the purposes of these amendments are to ensure, as far as possible, that the Commonwealth offset issues are considered and, if appropriate, dealt with as part of the BC Act assessment process.

What does it mean for me?

These terms will bring much needed certainty for project proponents and other stakeholders.

If your project needs EPBC Act approval, you should ensure that your biodiversity assessments adequately and appropriately consider offsets for any NES Matters as well as BC Act matters.

However, the proposed changes should allow a greater alignment between NSW and Commonwealth processes and eliminate some of the double assessment (and possibly double offsetting) which would otherwise be required.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.